All the ‘experts’ are once again beating on their drums, complaining and blaming everyone and anyone associated with the boss for the lack of safety in our construction industry.
The real truth behind the perceived lack of safety in the construction industry is the tender system. The way we procure our projects conceals the real investment in safety, along with innovation and quality.
When we examine the total cost allocated toward the three elements within any tender submission, typically we record safety spending as a ‘nil’ investment as these costs are buried within a single figure on the bottom of a tender form (and rarely identified in any portion of the trade break ups). This leaves the value undetectable, and without a budget allocation to measure the allowance against, we are faced with the accusation of underfunding the cost of safety.
This allegation comes despite the hundreds of million dollars in actual expenditure in protecting our workforce. We invariably see it pass the standard “pub test,” especially when a worker is injured on a Victorian construction site. This comes partially as a consequence that a compromise occurs due to the lack of transparency of this mammoth investment, and the blame gamers are out for revenge.
The fact is that even the most stringent audit on the greater portion of this investment would be hard pressed to clearly identify the actual value we have garnished in the industry. The same holds true generally for all work in the state of Victoria over the past 20-plus years (from the time the ‘Tool Box’ meetings were implemented). This is primarily due to the costs being “lost” from the accounting process because they are buried in the bottom line of the tender form.
It is unlikely that even the most trained forensic accountant could unravel the total investment, as the client effectively does not want to see how much he is spending. The principal contractor, meanwhile, fails to clearly see the total expenditure, as much of it is passed onto the trade contractor, and ‘lost’ in his/her total overhead costs, which are often dismissed simply as a cost of doing business.
Our current ‘tick the box’ approach severely fails the “standard pub test” on the basis that whilst the obligation to maintain a safe site is mandatory, this investment (money) is unidentified in the tender bottom line. Problems occur when the trade contractors are short-changed by the principal contractor because they in turn have elected to run their bid at unsustainable margins, and they ultimately compromise the trades to reduce their investment in the most paramount element of the whole project.
With the exception of the Department of Defence, a number of multi-national organisations and a few larger corporate players that have invested the appropriate resources in separating this expenditure, the larger proportion (potentially as high as 85 to 90 per cent) views safety costs part and parcel of the tender sum. These “hidden” costs have no viable chance of eliminating the perception that safety on our sites is underfunded.
Henry Ford (upon the initial failure of ‘Tin Lizzie’ to make an impression on his overall sales targets), famously said “Well, one thing you can’t sell is safety.”
This statement fits the subject at hand; you cannot be shown to be “buying” the required safety when it is concealed within the tender system.
There is a relatively simple method to ensuring that the investment in safety is fully realised and applied to eliminating all potential safety breaches, and that is to have the actual total incentivised by a taxable concession and declared or made compulsory as part of the original expression of interest (subsequently transferred to the building permit). This allows for the auditing process to be achieved and therefore the total investment transparently identified to ensure maximum value can be implemented to enable us to manage every risk faced by our workforce.
Failing to have such a vast sum of money being washed through our industry without any real accountability is a waste that can at this point in time only measured in lives lost, productive site hours compromised and financial penalties for the ’uninvolved.’ The fact is that too many of the trade contractors who have tried to assemble a ‘safely’ trained workforce are compromised as a result of the tender system.
Without safety, we cannot guarantee a productive workforce the risk-free environment we are obligated to provide. Enhancing the transparency of the investment through both a declaration and an audit function will ensure that the current investment is not only sufficient, but is retained by the trade contractor to spend it on the training and education that will the pass any pub test, improve quality and open up the door to a higher level of innovation.